The US motor giant Ford has announced that it has made a $765 million deal with the Chinese manufacturer Zoyte Auto. The companies will both have a 50% share in the new deal to build electric cars for the Chinese market. Ford will build the new vehicles under the Chinese brand name in the Zhejiang Province. The new deal has been agreed but under Chinese law it still requires approval from the government before it can be finalized.
Zoyte Auto has sold over 22,500 electric vehicles in China this year, and knows how to appeal to the Chinese market. The company has extensive experience in the motor manufacturing industry, and Is also looking into other projects in the future. Ford has made a commitment to this deal, and claims that it wants 70% of its sales in China to be electric vehicles. This deal is seen as a step in the right direction for both sides of the partnership.
This new deal was signed during President Trump’s recent visit to China, in which other commercial deals were signed between the two countries which are thought to be worth approximately $9 billion. Ford Motor said in a statement. “Zotye Ford will introduce a new brand family of small all-electric vehicles,” Ford group vice president Peter Fleet said in the statement. “We will be exploring innovative vehicle connectivity and mobility service solutions for a new generation of young city-dwelling Chinese customers.”
This deal comes at a good time for both companies, as the Chinese government has reported it wants to push for the electric vehicle market and is placing more restrictions on cars that run on fossil fuels. It wants car manufacturers who do produce fossil fuel cars to produce zero and low emission models, which will need to attain an energy score under new rules. These rules apply to companies that import over 30,000 vehicles a year That equates to manufacturers requiring at least 10% of their vehicles being electric.
This is part of China’s aggressive tactic to phase out fossil fuels altogether to reduce its ongoing pollution problems. This is a goal which is shared with the rest of the global community, with countries like France and the UK pushing for the move to electric vehicles. A recent report shows that China’s plans are to create an all electric market by 2030 and has spent billions on research and funding projects into new technology. The government’s original plan was to ban fossil fuel cars, but they later backtracked and revised the plans to allow manufacturers time to adapt.